IBM to slash salaries as part of settlement

IBM has settled a lawsuit that was filed where it was accused of illegally withholding overtime pay from some technical support employees that were eligible for the overtime pay. IBM settled the case for $65 million dollars in 2006, but now they figured out in their infinite wisdom that they need to reclassify over 7,600 of their employees as eligible for overtime.

The catch is that once these employees are reclassified, IBM will cut the base salary that they pay these employees by 15% for the first 40 hours to compensate for the overtime they will have to legally pay now.

It certainly does not take a rocket scientist to figure out that the reclassified employees are going to lose money on the deal, and while IBM is going to offer a “transition payment” to affected workers, that will not make up for the money that they will lose in the long term.

The bottom line is that IBM is trying to cut costs, and is telling workers that this is necessary to remain competitive within the industry. Employees are expecting their hours to be cut under this new plan. It never surprises us how companies that are making money will find new and creative ways to make their employees unhappy, just to make an extra buck.